Y2K threat boosted states' efficiency

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01/29/2001 - Updated 08:55 PM ET Study: Y2K threat boosted states' efficiency

By Charisse Jones, USA TODAY

The feared Y2K computer glitch that threatened to wreak havoc on business and government a year ago instead compelled many states to implement changes that made them more efficient, says a 50-state study released Tuesday.

Upgraded computer systems and improvements in how states collect and share information highlight a period in which a robust national economy enabled some states to accumulate surpluses, according to the Government Performance Project, a joint effort by Syracuse University's Maxwell School and Governing magazine.

Though the study doesn't analyze the cost of all these improvements, the project's director, Dale Jones, says, "The biggest payoff is that citizens have much more confidence and trust in government. We can't put a price tag on that."

Yet as the economy slows, the looming question is whether states will soon be in the same financial straits that led to program cuts and deficits a decade ago.

"The states are in pretty good shape, at least in the short term, to weather an economic downturn," Jones says.

The report graded each state in several areas, including financial management, personnel practices and information technology.

A similar grading was done in 1999.

Twenty-nine states one more than in 1999 received an overall grade of B- or higher.

Utah and Washington scored an overall grade of A- for the second time in two years, and Michigan joined them at the top.

Missouri and Virginia, slipping from the top tier this year, dropped from an A- in 1999 to a B+.

Alabama made strides but again had the lowest overall grade, from a D in 1999 to a C- this year.

As a whole, states made the most progress in information technology.

Alaska and Virginia are among the tide of states increasing the tasks citizens can do online, from renewing a driver's license to e-mailing the governor.

The recent strong economy helped 15 states, including Pennsylvania, Florida and Minnesota, to create rainy-day funds equal to 5% of the general fund, the report says.

California, which had no such reserve four years ago, has proposed to set aside $1.9 billion, equal to 2.4% of revenue, next year. In addition, though the state had a deficit of $3.6 billion in 1997, officials project a $5 billion surplus next year.

The strong economy was not always helpful. Low unemployment made it difficult for many states to find qualified workers, who were lured to the private sector by better pay.

However, the shortage compelled many states to find innovative ways to recruit workers.

In South Carolina, where state agencies had to submit reams of paperwork to fill a vacancy, each division is now free to make hiring decisions. And citizens can find out about jobs online.


-- Martin Thompson (mthom1927@aol.com), January 30, 2001

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